Meanwhile, Venezuela Scrambles for More Dollars
Courtesy of Jr. Deputy Accountant
Well I guess we don’t have to ask who you are wearing…
Can you imagine being in a situation where you are this desperate to get dollars?! Good thing Zimbabwe Ben is doing his part.
WSJ:
Four months after enduring a currency devaluation, Venezuelans continue to see the value of their money evaporate under the weight of foreign-exchange controls that play a key role in President Hugo Chávez’s socialist economic policies.
The "strong bolívar," as the currency is officially named, is anything but. It has dropped 26% so far this year, to 8.05 per U.S. dollar on Friday in black-market trading, which sets the currency’s real market value.
The bolívar’s plunge is an embarrassment for the government. Mr. Chávez announced in January that the country would slash the value of its currency, then officially pegged at 2.15 to the dollar, in half. He vowed the bolívar would strengthen in the black market to match the new official peg of 4.3 bolívars to the dollar.
Supply and demand, however, haven’t cooperated. Venezuelans, afraid of inflation and accustomed to recurrent devaluations, continue to take their money out the country by paying the black-market rate for dollars. The government, meanwhile, doesn’t sell enough dollars at the official rates to meet demand.
Naturally, Hugo "I Just Need a Hug" Chavez says that he will be sending out the military to combat merchant price-fixing. Erm, that’s the problem. Not 30% inflation for the year, couldn’t possibly be anything to do with that.
Just a friendly reminder: this is what happens when you let your evil dictator meddle in your money, kids.
